Offshore safety and support vessel specialist Esvagt has announced its plans to find a way through the depressed environment caused by Covid-19 and low oil prices.
The company says that both significant oil storage delaying drilling investments and exchange losses from the Norwegian krone and the British pound are having a major effect. Additionally, the company has had to contribute to an economic rescue package for Havyard, who are building three new service operation vessels for Esvagt.
“All in all, these are elements that put Esvagt’s liquidity under pressure. We have to relate to this,” CEO Peter Lytzen said.
Esvagt says that its board of directors and upper management have agreed a 15% pay cut, while management has agreed a 10% pay cut. All other onshore employees have taken a 5% reduction. The measures are in place for one year.
“We have to balance our responsibility to keep our employees; to ensure the company’s continued healthy operation and at the same time tend to our obligations. We do not wish to send people home, and we can’t, because we have a responsibility as a subcontractor to society’s crucial energy infrastructure,” Lytzen said.
Esvagt said the pay reductions, together with the postponement of investments and a few vessel decommissions will contribute to the company having the necessary liquidity. It added that it will also discuss the renegotiation of contracts with partners and suppliers.